Correlation Between ThinTech Materials and Catcher Technology

Can any of the company-specific risk be diversified away by investing in both ThinTech Materials and Catcher Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ThinTech Materials and Catcher Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ThinTech Materials Technology and Catcher Technology Co, you can compare the effects of market volatilities on ThinTech Materials and Catcher Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ThinTech Materials with a short position of Catcher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ThinTech Materials and Catcher Technology.

Diversification Opportunities for ThinTech Materials and Catcher Technology

-0.32

Correlation Coefficient

ThinTech Materials  Catcher Technology

Very good diversification

The 3 months correlation between ThinTech and Catcher is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ThinTech Materials Technology and Catcher Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcher Technology and ThinTech Materials is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ThinTech Materials Technology are associated (or correlated) with Catcher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcher Technology has no effect on the direction of ThinTech Materials i.e., ThinTech Materials and Catcher Technology go up and down completely randomly.

Pair Corralation between ThinTech Materials and Catcher Technology

Assuming the 90 days trading horizon ThinTech Materials Technology is expected to under-perform the Catcher Technology. In addition to that, ThinTech Materials is 3.5 times more volatile than Catcher Technology Co. It trades about -0.11 of its total potential returns per unit of risk. Catcher Technology Co is currently generating about 0.23 per unit of volatility. If you would invest  19,300  in Catcher Technology Co on December 30, 2024 and sell it today you would earn a total of  2,050  from holding Catcher Technology Co or generate 10.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ThinTech Materials Technology  vs.  Catcher Technology Co

ThinTech Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days ThinTech Materials Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Catcher Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catcher Technology Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Catcher Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ThinTech Materials and Catcher Technology

The main advantage of trading using opposite ThinTech Materials and Catcher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ThinTech Materials position performs unexpectedly, Catcher Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Catcher Technology will offset losses from the drop in Catcher Technology's long position.

The idea behind ThinTech Materials Technology and Catcher Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.